Facebook’s New Remote Salary Policy Is “Barbaric” | Hacker News Reader

Facebook’s New Remote Salary Policy Is “Barbaric”

medium.com

34 pointsilluminated47 comments

I don’t really agree with the article. Since 1998 I have lived in the mountains in Arizona, certainly a reasonably inexpensive place compared to California or the east coast. When working remotely I have always charged much lower rates, with the understanding that I do work on my own schedule, that is, I may be off line a lot, but in a weekly time scale I put in the required hours.

Twice I have temporarily relocated to work on site (Google in Mountain View, Capital One in the Mid West). I earned much more money but my expenses were larger.

I think Facebook’s plan sounds OK.

Calling it 'Barbaric' to reduce the already absurd salaries of Facebook employees to slightly less absurd levels seems hyperbolic to say the least. No one is forcing you to work there, and if you are at Facebook you almost certainly have lots of other options (essentially all of which have the same policy of adjusting compensation based on CoL).

It's not a stretch to imagine other companies looking at what Facebook gets away with, to also model their behavior. This isn't endemic to Facebook, so disregarding this as "only applying to Facebook" is absurd.

What's barbaric is the low income, low savings, and high credit card/student debt that many Americans are saddled with.

Not barbaric at all. This is normal for almost all larger companies. Pay is based on the local geographic market. Only at higher levels L6+ does the span diminish. It is basic supply and demand, < L6 is easy to replace.

I think it is not fair that everyone earns the same regardless where they live. Cost of living must (and probably already is) included. If everyone would earn the same amount, consequence would be more people moving to areas with lower living cost . Why not even move into a 3th world country and live like a king with your first world salary? Of course, one could argue, that Zuckerberg & co only want to make more money by decreasing salaries for their workforce. Instead of giving this money to shareholders, why not donate it? Especially now, when millions of people lost their jobs..

>Why not even move into a 3th world country and live like a king with your first world salary?

And that's a bad thing why exactly?

Well, it would not be a bad thing per se. But if everyone would start doing that, costs will rise again and in the end, situation (high living cost, rents, etc.) will be the same. It is just not sustainable. You may also think, that people in 3rd world countries do not have good access to education, so basically you take advantage of them, only because you were born in a first world country and they were not... Of course, you could be a really generous king and even help the people there to have better access to education. That would be sustainable.

> You may also think, that people in 3rd world countries do not have good access to education, so basically you take advantage of them, only because you were born in a first world country and they were not

How are people born in developed countries not already doing this via importing from countries with little or no labor laws and environmental protections?

If anything, an educated person going to an undeveloped place and sharing their resources that would have gone to an already developed place is a huge benefit for the undeveloped place.

It seems like it would help out low cost areas and the poor and all in all help equalize the world. With proper regulations, taxes, that is.

I don't know that it is, but there is a lot of anguish over gentrification in areas in the US which seems to me to be exactly this, just on a smaller scale. The assumption that "rich" moving into "poor areas" lifts all boats in the area is not necessarily true.

I just found an interesting article about the topic, where GitLab explains why they do not pay everyone the same salary [1]

[1] https://about.gitlab.com/blog/2019/02/28/why-we-pay-local-ra...

> If everyone would earn the same amount, consequence would be more people moving to areas with lower living cost .

What's supposed to be the downside, exactly?

Sooner or later, costs would begin to rise in that area, because the infrastructure, healthcare, etc. must be improved (due to population growth). Meanwhile, in the former high living cost area, prices would drop. Unskilled low wage employees would loose their jobs because of decreasing demand. And somewhere in the future, everyone starts recognizing that the tables have turned and people would start moving back. It's an endless game...

And in the case of gitlab, they state an interesting reason: [1]

> Paying the same wage in different regions would lead to: [...]

> - A concentration of team members in low-wage regions, since it is a better deal for them, while we want a geographically diverse team.

[1] https://about.gitlab.com/handbook/total-rewards/compensation...

Why is that a bad thing? Expensive areas over time becoming more accessible and vice versa effectively means that no place is permanently off-limits from the less wealthy.

And what is the downside of that? Seems like the col of world would equalize and in general things would become more optimal.

> Sooner or later, costs would begin to rise in that area, because the infrastructure, healthcare, etc. must be improved (due to population growth).

How many towns were forced to upgrade their infrastructure because you moved in?

It seems to me you are making up extreme slippery slope-type catastrophical scenarios.

Getting back to the real world, I know a few IT workers who had to move to an extremely expensive city when they were hired by FAANGs but since then they were able to move back to their home town while keeping their salary. Could you please explain how your scare story applies to this type of case, which represents most if not practically all cases?

> Sooner or later, costs would begin to rise in that area, because the infrastructure, healthcare, etc. must be improved (due to population growth)

I don't see why that is as the extra infrastructure will come with more tax revenue. For example, Dallas-Forth-Worth and the Houston metro populations are the 4th and 5th largest in the US and have each grown a estimated 19% in the past decade [0] and yet their cost of living still sits right at the national average [1, 2].

[0]: https://en.wikipedia.org/wiki/List_of_metropolitan_statistic...

[1]: https://www.payscale.com/cost-of-living-calculator/Texas-Dal...

[2]: https://www.payscale.com/cost-of-living-calculator/Texas-Hou...

Presumably there are some benefits to people coming to the office.

If there truly is then pay extra for coming to office, but not because of their col choices which everyone can choose best themselves.

The downsides are not clear to me as well. The only argument I could think of is a nationalistic sentiment that nations should live & work together but I find it poorly motivated in a global world. I see, however, a lot of benefits of easing out the wealth distribution geographically. And you rarely want to live in the cheapest 3rd world country far away from your family. It's a CoL-vs-comfort balance you need to figure out for yourself - no calculator will be 100% accurate here.

I've been riding this ride through most of my career, working remotely for western startups mostly from Poland. In the end, I don't care how "fair" your compensation policy is - it all comes down to the best alternative offer.

Continued overcrowding of cities. Continued discrimination between nationalities.

> Continued overcrowding of cities. Continued discrimination between nationalities.

Where do you see your "continued overcrowding of cities" if anyone is free to live wherever they want, provided there is a reliable high-speed internet connection?

And exactly where do you see any discrimination if anyone is free to worke everywhere?

Did I miss a left turn somewhere? The thread is about better pay in cities, vs the pay cut if one leaves the city. Better pay for locals (read Americans) vs pay for remote workers which includes all people living in other countries.

But this is obvious. What is the question?

You can choose where you live so it is fair. If you want to live at certain area it should be worth it to you. This would optimize the world and make resource usage more optimal. I believe it is unavoidable anyway. As time goes on companies will start to pay based on actual value brought as this is more optimal and competitive. If there truly is a need for there to have at least n persons in each city then they will fill that quota, but rest of the pay will be fair.

No 'fairness' argument visible in that? Why is it OK to discriminate because it's 'voluntary'? (Which is not obviously true). Need some explanation.

> If everyone would earn the same amount, consequence would be more people moving to areas with lower living cost .

And this is bad because?..

One reason is that wealthy tech outsiders move to poorer areas and drive up real estate values to the point that only wealthy tech outsiders can afford to buy houses (shutting out many/most of the local residents).

In principle, it is fair to get paid same regardless of where you live because you should be getting paid for your contributions, not where you happen to connect your laptop. However, in current form of capitalism, you don’t get paid in proportion to your yield but rather in proportion to what your employer thinks you will need to maintain living standards they deem you are worthy of. This, in fact, is the cause of inequality where chain of command can decide to keep vast majority of value generated for themselves regardless of true value of their own yield. We often try to justify this inverted economics under the disguise of risk taking or leadership or making big decisions but if you look closely this singular aspect is the cause of why 1%ers exist at all in current system.

Can someone explain how cost-of-living salary adjustment work in practice? Can you move to an exclusive area, say a small island where the average house and land value is in the millions, and now demand a significant raise in order to afford living there?

I would assume it will look similar to what GitLab is doing: https://about.gitlab.com/handbook/total-rewards/compensation...

This thing is just laughable. Detroit has a higher comp ratio than Ann Arbor. These people are literally smoking crack.

Their comp ratio for my country is less than 0.5. I'd have to take a serious pay cut to go work for them.

I think this is the currently-inchoate reason people are finding this policy problematic... we know that it's bullshit. You'll be able to move from downtown $EXPENSIVE to rural $CHEAP and the company will aggressively and happily cut your salary and perhaps even "helpfully" backdate it for you, but if you one day announce to the company out of the blue that you want to move the other way for whatever reason, the company will at the very least drag they feet and probably eventually won't approve it.

I've even seen this already happen in real life for distributed companies who already have non-Silicon Valley offices; when someone wants to move to SV and asks for the corresponding fairly massive raise, they've been told "no".

There'll be a honeymoon period where this may be true but this is the inevitable stable point, and we all know it on one level or another.

The only reason this looks even remotely feasible for the companies is the accidental historical fact of them all living in a high-expense area. Once they get more used to a more widespread remote workforce, this policy will only ever work out in the company's favor, never yours. There is NO WAY we're going to have the right to simply announce to our companies one day that of our own free will, we've decided to move to a 30% more expensive place (because why not? they'll pay for it, supposedly) and they'll just give us a 30% (or whatever) raise. Ludicrous nonsense. It's a lie.

If this point isn't a stable point, it'll end up tipping in the other direction... companies pressuring their remote employees to stop living somewhere so expensive and move somewhere cheaper. "Pressuring" here includes things like "when layoffs hit, hit the high-cost-of-living employees first", in addition to direct threats.

Enjoy the remote work honeymoon; it isn't going to last.

I think a pay increase depends on the needs of the company. If your company is looking to hire someone with the job as you in the higher cost of living area, then a transfer and pay bump would be potentially easier than hiring a new employee. Now, if the company isn’t looking to employ more people in the high cost of living area I don’t see them paying someone more if that type of salary was not in their budget.

They say cost of living, but it’s more cost of labor. If you are a software engineer on this island, and the salaries for software engineering jobs there are a third of your salary because there is no tech industry, you will be paid significantly less. You don’t have opportunities to get a job that pays your old salary or more.

True, we didn't have anywhere near as many opportunities before, but if remote work becomes more and more the norm (especially in the wake of the pandemic), then we will have more opportunities to find work elsewhere, despite living in a region with less in-person job opportunities.

Generally speaking, unless you are a contractor, it's hard to work for a company unless they have an office in the country where you live. So, while it's not an island, a good example of what you are talking about might be Monaco. Basically the entire country (tiny as it is) is filled with super rich people. But you can't easily work from Monaco because high tech companies do not have offices there.

I have essentially the same problem in Japan. I mean, big companies usually have offices in Tokyo, but if I want to work for a startup somewhere, it's always going to be contracting. For a variety of reasons, that's sometimes not desirable (and a lot of companies refuse to hire contractors for lots of other reasons).

So, basically, the only way you're likely to run into this is if you move to SF, which is usually no problem ;-)

What's actually barbaric is forcing people to move away from their friends and family in their hometowns to come live in San Francisco where there's literally faeces in the streets and a shack costs $1M let alone a livable home when can do the work just fine from their homes. The medium to large 6-figure salaries are a trade off and it's actually fairer to employees to allow them to make the choice themselves.

A shack in SF is a million bucks precisely because Facebook won't pay a SF salary unless you are in SF. If they paid a SF salary no matter where you lived, then a shack in SF would not be worth one million dollars any more.

So you're saying that not only would it be better for the workers, but San Francisco would become more affordable to poorer people who don't have tech jobs and who were perhaps born there? Sounds like a win-win to me.

Making housing more affordable sounds like a net win. Those working there would be able to afford better housing.

I have two issues with this article:

1. The author uses Zapier as an example of how to "make up" for CoL salary adjustments. However, Glassdoor tells me that Zapier pays WAY under market compared to FAANG and others. They also have a high recruiting bar, which tells me that they are good at getting their engineers on the cheap.

2. Facebook will still likely pay higher to much higher than the local market since they use RSUs as the bulk of their total comp.

There’s a big difference between market value, and cost of living.

There are plenty of places with lower cost of living where a software developer can earn Silicon Valley-level salaries.

That’s especially true when you consider that lots of compensation comes in the form of stock options. I’ve heard stories of companies outsourcing to the Phillipines, etc. They build an ecosystem to train workers overseas. Then other companies swoop in.

Pretty soon, the salaries are the same as in the US.

[i was overly emotional when i posted this, sorry]

Just to be clear, you're comparing actual discriminatory laws to a private company setting compensation on cost of living? No one's forcing people to move out of the valley...

I live in Colorado and have plenty of opportunities, and the perks of living here, for me, far outweigh any salary increase I could get moving to the Bay Area. In fact I don't think you could pay me enough to move there.

Quality of life is far more important to me than doubling my salary.

which you will then spend on housing anyway

Reply on news.ycombinator.com